Mumbai: Walton Street Capital LLC, a Chicago-based real estate-focused private equity firm, is set to strengthen its presence in India through the newly launched Walton Street BlackSoil Real Estate Debt Fund-I, a joint venture between Walton Street and BlackSoil group.
The fund has made its first closure at Rs200 crore, according to the BlackSoil management.
The fund, with a Rs300-crore-target, will be utilized to invest in secured debt instruments in construction and the development of residential real estate assets in key tier-I cities such as Mumbai, Bengaluru and Hyderabad, said Ankur Bansal, co-founder and partner at BlackSoil.
Affiliates of Walton Street Capital have invested over $9 billion of equity in more than 350 separate transactions globally.
Walton Street Blacksoil Real Estate Debt Fund-I has been registered with the Securities and Exchange Board of India (Sebi) as a Category II Alternative Investment Fund (AIF) and has raised funds primarily from domestic investors.
“We plan to invest in mid-market affordable housing projects in metro cities. In Bangalore, the size may range between Rs50 lakh-1 crore while it may be in the range of Rs1-2 crore in Mumbai," said Bansal. “We will invest Rs30-50 crore per project and expecting a return of 20-25%."
BlackSoil had launched its maiden Sebi-registered AIF Category II Realty Fund in 2013 with a corpus of Rs158 crore and deployed it completely across seven transactions.
BlackSoil also recently launched its Reserve Bank of India (RBI) registered non-banking financial company (NBFC) from which it has invested Rs260 crore in real estate.
Promoters of the Blacksoil Group include Shashi Kiran Shetty, chairman of Allcargo Group; Gnanesh Gala, promoter of Navneet Education; and Mumbai-based realty consultant Virendra Gala.
Affiliates of Walton Street Capital India have been investing in India since 2007 and have closed investments of Rs1,350 crore since 2007 across both equity and structured debt in India, according to the company website.
The recent push by the government in the affordable housing space has made the real estate sector attractive for investors and a number of funds have been launched in the last the one year.
Early this month, Mumbai-based developer Prestige Estates Projects Ltd, along with HDFC Capital Advisors Ltd, the real estate asset management arm of mortgage lender Housing Development Finance Corp., had launched an investment platform with a capital base of Rs2,500 crore (equity & debt), for low-cost housing projects in India.
In December, HDFC Capital Advisors Ltd raised $550 million for its second affordable housing fund. The HDFC Capital Affordable Real Estate Fund II plans to target affordable and mid-income residential projects in India’s leading cities.